Medicare fraud alleged

A central Ohio businessman defrauded elderly and disabled customers and bilked Medicare and Medicaid out of nearly $26 million between 2002 and 2005, according to a federal indictment.

A central Ohio businessman defrauded elderly and disabled customers and bilked Medicare and Medicaid out of nearly $26 million between 2002 and 2005, according to a federal indictment.

Michael Cowen, who co-founded Active Solutions in Worthington in 2002, was charged by federal prosecutors in Virginia, according to documents unsealed this week.

Residents of Ohio, Virginia and several other states arranged through Medicare and private insurance providers to buy what they thought were "lightweight, collapsible, portable, electric power scooters," the indictment said.

Instead, they received "a heavier and less transportable motorized wheelchair," which earned a federal reimbursement of between $5,000 and $8,000 for Active Solutions for each vehicle. Motorized scooters bring about $1,900 in reimbursements and are not normally covered by Medicare, the indictment said.

Active Solutions used the proceeds to lease a jet for $1.09 million and buy vehicles. Proceeds also were transferred to private and offshore accounts, the indictment said.

Although it operated as Active Solutions, the company is registered as CBI Co. LLC. The company moved from 667 Lakeview Plaza Blvd., in Worthington, to 6694 Upper Brook Way in New Albany, according to forms filed this year with the Ohio secretary of state's office.

A phone number listed on the company's Web site does not work.

Cowen was arrested in West Palm Beach, Fla., this week and will be extradited to Virginia, said his attorney, Anthony Anderson in Roanoke, Va. The indictment against Cowen includes charges of conspiracy to launder money, health-care fraud, mail and telemarketing fraud, wire and telemarketing fraud, tampering with consumer products and obstruction of justice.

Anderson said he had not yet met with his client. But he "will look forward to defending aggressively each and every allegation in the indictment," Anderson said.

This week's allegations are connected to ones made three years ago by then-Ohio Attorney General Jim Petro, who sued Active Solutions for misrepresenting products, failing to honor warranties and substituting expensive and less mobile wheelchairs for scooters that were ordered. Petro had said his office received numerous complaints.

The Ohio suit was filed in 2004, the year in which Active Solutions submitted $18.2 million in claims, the Virginia indictment said. About a year later, Ohio deferred to federal investigators after they began looking into the case, Attorney General Marc Dann's office said.

Through daytime television advertisements, Active Solutions targeted Medicare recipients with ambulatory needs, according to the indictment. If customers who called a toll-free number met certain qualifications, Active Solutions employees would arrange three-way calls between company representatives, customers and customers' doctors to obtain a prescription for a "power chair scooter," the indictment said.

"Sales staff did not provide to the physician, nor make the physician aware of the fact that a power scooter required a separate and distinct" certificate of medical necessity, the indictment said. Cowen told sales personnel to add "comfort items" to the certificate after they were signed by physicians, increasing the value of the claims, the indictment said.

Customers were alarmed when they received bulky wheelchairs for use in such places as "basement apartments and mobile homes where the limited space made it impossible for the motorized wheelchair to freely maneuver from room to room," the indictment said.

Cowen ran the company's day-to-day operations. His partner, Jan Michael Bliwas, pleaded guilty to conspiracy to commit health-care fraud, telemarketing fraud and money laundering. He is to be sentenced next month.

paul.wilson@dispatch.com

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.